What is Kennametal's gross profit margin?

What factors drove the changes in Kennametal's revenue and profit?

What were the key takeaways from Kennametal’s earnings call?

What were the key takeaways from Kennametal's earnings call?

What does Kennametal do and what are its main business segments?

Did Kennametal beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Kennametal year over year?

What is the market's earnings forecast for Kennametal next quarter?

**【Key Takeaways】**
- **Revenue Recovery**: Q1 FY26 marks first year-over-year organic growth (3%) driven by project wins in Aerospace, Energy, and Transportation.
- **Power Generation Growth**: $250M TAM for gas turbines and backup power systems, targeting 10%+ CAGR to support AI data centers.
- **Tungsten Pricing Strategy**: Implemented surcharges to offset 20%+ cost increases, with peak price advantage in Q3 and neutral impact by Q4.
- **Cost Efficiency**: $8M Q1 restructuring savings toward $35M annual target, supporting 15.3% EBITDA margin.
- **FY26 Outlook**: Raised sales guidance to $2.1B-$2.17B (1%-3% growth) and EPS $1.35-$1.65, driven by pricing actions and market recovery.

**【CEO Summary Section】**
- **Revenue Growth**: Q1 FY26 organic revenue increased 3%, marking the first year-over-year growth in 2 years, driven by project wins in Aerospace, Energy, and Transportation.
- **Project Wins**: Secured key wins in Power Generation (e.g., backup generators for AI data centers) and Aerospace (high-precision tooling for military components), positioning for long-term secular growth.
- **Cost Management**: Realized $8M in restructuring savings, with plans to achieve $35M annually by reducing employment costs and consolidating operations.
- **Tungsten Pricing**: Implemented surcharges to offset 20%+ year-over-year tungsten cost increases, maintaining gross margin stability.
- **End Market Outlook**: Modest improvement in Transportation (IHS estimates up 100bps to -1.5%), while Aerospace benefits from supply chain recovery and OEM production increases.

**【CFO Financial Commentary】**
- **Top Line**: Q1 sales $512M (3% YoY), beating prior guidance due to better-than-expected volume across all end markets.
- **Profitability**: Adjusted EBITDA margin 15.3% (vs. 14.3% prior year), driven by price/tariff surcharges and restructuring savings.
- **EPS**: Adjusted EPS $0.34 (vs. $0.29 prior year), with FY26 outlook raised to $1.35-$1.65 due to pricing actions and market improvements.
- **Cash Flow**: Q1 free cash flow negative $5M (vs. $21M prior year) due to higher tungsten inventory investments.
- **Guidance**: FY26 sales $2.1B-$2.17B (1%-3% growth), with 7% price/tariff tailwind and 2% FX benefit.

**【Q&A Key Highlights】**
- **Power Generation TAM**: CEO highlights $250M TAM for gas turbines and backup power systems, expecting 10%+ CAGR driven by AI data center demand.
- **Tungsten Dynamics**: CFO notes Q3 will see peak price/raw material favorability, with neutral impact by Q4 if tungsten prices stabilize.
- **Share Gain Strategy**: CEO attributes wins to innovative solutions, commercial excellence, and operational reliability, mitigating risk of customers switching to non-tungsten alternatives.
- **General Engineering**: Modest improvement in Americas (IPI recovery) offset by EMEA weakness, with FY26 outlook flat to +1%.
- **Tariff Management**: Dynamic surcharge adjustments to reflect changing trade policies, with long-term strategy to embed costs into permanent pricing.

Kennametal Inc. (KMT) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

KMT

KMT fundamentals

You can ask Aime